New Social Inequality in Work Organisations: Challenges for the Eastern EU Member States (By Invitation‪)‬

Eastern European Economies after Affiliation After their formal affiliation to the EU, Eastern European economies face the challenge to create a dynamic labour market in order to redress still substantial misallocation and at the same time to grant basic worker protection against the risks of a market economy. Generally, real wages declined and wage inequality increased while at the same time there was a re-allocation of jobs between the economic sectors as well as the growth of the informal sector, due to increased self-employment (as an alternative to unemployment). The reduction of employment was somewhat cushioned by social protection programs. But there are great regional differences. While in Estonia labour legislation imposes low termination costs for labour contracts with the result of higher labour flows and possibly higher job creation rates, in Poland and Slovenia labour market institutions are much more restrictive.